Exempt or Nonexempt Employees

In: Business and Management

Submitted By sichjosh
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Case Study 1 Exempt or Nonexempt Employees
Shawnte Reed
Liberty University
Compensation Management
BUSI 645-B01
Dr. Ed Sherbet

Case Study 1 Exempt or Nonexempt Employees
There are many benefits to having a management or leadership position. A manager is normally paid a salary, while lower level workers are paid an hourly wage. Some other benefits managers usually receive are sick leave and vacation time. However, there are drawbacks to having a management position such as overtime and working hours. Managers often are exempt from overtime pay even when they work extended hours during the work week. Consequently, managers are paid the same amount of money whether they work eight hours or twelve hours. This case study involves Jane, a shift leader at a department store. Jane does not receive overtime pay even though she works up to 50 hours per week because she is an exempt employee.
Policy pertaining to overtime pay is set by the Fair Labor Standards Act (FLSA). According to the FLSA, “ employers are to pay overtime rates (one-and-a half times regular pay) for any hours worked in excess of forty hours in a work week with exemptions for employees acting in an executive, administrative, or professional capacity” (Dorris, 2009, p. 1253-1254). Exempt employees fill positions that are classified as executive, learned professional, administrative, computer, outside sales, and creative professional. Jane is classified as an exempt employee because she is part of the management team. Based on the previous she is most likely classified as an executive or administrative employee. Martocchio (2015) defines the executive criteria as “management of the enterprise or a recognized department or subdivision” and administrative as “performing office or non-manual work directly related to the management or general business operations of the employer or employer’s…...

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